Coca Cola 2011 Annual Report Download - page 110

NOTE 9: ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consisted of the following (in millions):
December 31, 2011 2010
Accrued marketing $ 2,286 $ 2,250
Other accrued expenses 2,749 2,920
Trade accounts payable 2,172 1,887
Accrued compensation 1,048 1,068
Sales, payroll and other taxes 405 401
Container deposits 349 333
Accounts payable and accrued expenses $ 9,009 $ 8,859
NOTE 10: DEBT AND BORROWING ARRANGEMENTS
Short-Term Borrowings
Loans and notes payable consist primarily of commercial paper issued in the United States. As of December 31, 2011 and 2010,
we had $12,135 million and $7,535 million, respectively, in outstanding commercial paper borrowings. Our weighted-average
interest rates for commercial paper outstanding were approximately 0.2 percent and 0.3 percent per year as of December 31, 2011
and 2010, respectively. In 2010, the Company assumed $266 million of short-term borrowings in connection with our acquisition of
CCE’s North American business. Refer to Note 2.
In addition, we had $5,685 million in lines of credit and other short-term credit facilities as of December 31, 2011, of which
$736 million was outstanding. The outstanding amount was primarily related to our international operations.
Included in the credit facilities discussed above, the Company had $4,625 million in lines of credit for general corporate purposes,
including commercial paper backup. These backup lines of credit expire at various times from 2012 through 2016. There were no
borrowings under these backup lines of credit during 2011. These credit facilities are subject to normal banking terms and
conditions. Some of the financial arrangements require compensating balances, none of which is presently significant to our
Company.
Long-Term Debt
During 2011, the Company issued $2,979 million of long-term debt. We used $979 million of this newly issued debt and paid a
premium of $208 million to exchange $1,022 million of existing long-term debt that was assumed in connection with our
acquisition of CCE’s North American business. The remaining cash from the issuance was used to reduce the Company’s
outstanding commercial paper balance and exchange a certain amount of short-term debt.
The general terms of the notes issued during 2011 are as follows:
• $1,655 million total principal amount of notes due September 1, 2016, at a fixed interest rate of 1.8 percent; and
• $1,324 million total principal amount of notes due September 1, 2021, at a fixed interest rate of 3.3 percent.
During the fourth quarter of 2011, the Company extinguished long-term debt that had a carrying value of $20 million and was not
scheduled to mature until 2012. This debt was outstanding prior to the Company’s acquisition of CCE’s North American business.
In addition, the Company repurchased long-term debt during 2011 that was assumed in connection with our acquisition of CCE’s
North American business. The repurchased debt included $99 million in unamortized fair value adjustments recorded as part of
our purchase accounting for the CCE transaction and was settled throughout the year as follows:
• During the first quarter of 2011, the Company repurchased all of our outstanding U.K. pound sterling notes that had a
carrying value of $674 million;
• During the second quarter of 2011, the Company repurchased long-term debt that had a carrying value of $42 million; and
• During the third quarter of 2011, the Company repurchased long-term debt that had a carrying value of $19 million.
The Company recorded a net charge of $9 million in the line item interest expense in our consolidated statement of income
during the year ended December 31, 2011. This net charge was due to the exchange, repurchase and/or extinguishment of
long-term debt described above.
During 2010, in connection with the Company’s acquisition of CCE’s North American business, we assumed $7,602 million of
long-term debt, which had an estimated fair value of approximately $9,345 million as of the acquisition date. We recorded the
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